This City Was Sick of Tech Disruptors. So It Decided to Become One.


In spring 2018, Seleta Reynolds, the general manager of the Los Angeles Department of Transportation, issued a grave warning about the new generation of urban transportation companies such as Uber.

“A lot of these private actors and companies are not mobility companies,” Reynolds told an audience at Harvard’s Graduate School of Design. “They are data companies. And they are building new empires on top of a platform that we are absolutely not ready for.”

The power dynamics must shift, she continued. “We have to bust our ways of thinking inside government in particular.”

Later that fall, Los Angeles launched an open-source data standard and software system designed to hold sway over these new operators. Known as the “mobility data specification,” or MDS, the platform collects information from discrete vehicle trips in near real time, and lets the city communicate back to operators.

Right now, it’s only being used by “micromobility” companies: In order to keep its sidewalks clear of stray dockless scooters and bikes, L.A. requires operators to send start and stop locations of individual vehicle trips back to City Hall, within five seconds, in addition to the routes they traveled within 24 hours. Eventually, all kinds of current and future transportation forms—from ride-hailing and car-sharing to delivery drones and autonomous vehicles—could fall under the omniscient gaze of the MDS platform. By gathering these data points, as well as trip times and whether vehicles are on or off, Reynolds says she can manage the size and dispersal of licensed private fleets, and eventually where they travel, take off, and land.

L.A.’s model has been hailed as key to the future of urban mobility. In the face of disruptive technologies clogging streets and edging into the skies, at least 70 U.S. municipalities and several global cities have adopted parts of MDS since L.A. formally launched its scooter rules in late 2018. The New York Times recently featured Reynolds as a problem-solving “eyewitness to monumental shifts in transportation.”

But the project has a powerful detractor: Uber. The ride-hailing giant has refused to share the data that L.A. seeks from its Jump e-bikes, claiming it would infringe upon riders’ privacy rights, and its lawyers assert that the architects of the MDS platform have an ulterior motive. In a hearing at L.A. City Hall in January, an Uber attorney argued that consultants hired to build MDS are “trying to help LADOT build an infrastructure to collect vast quantities of valuable, private, sensitive data so that they can find ways to monetize it and so they can ultimately control the physical movement of bikes, scooters and cars on the streets of Los Angeles,” according to a transcript. On February 25, the company will make its case to the California senate, as state lawmakers grapple with how cities ought to handle citizens’ travel data. And it has threatened to sue L.A. if the city doesn’t change its rules.

LADOT flatly denies that anyone is trying to monetize scooter data, and points to Uber’s reputation for flouting regulations and using lawsuits to get its way. The company’s history with data breaches might also lead one to question its newfound devotion to privacy.

But a number of privacy experts and civic technologists agree that, this time, Uber has some valid points about how L.A. has gone about building and sharing its mobility data platform. As LADOT has shaken up how government agencies operate and spread its model to cities around the world, it has faced criticism about transparency and privacy and alarmed industry incumbents beyond Uber.

In particular, critics have pointed to the city’s alliance with a secretive venture capital-backed start-up that is building its business on helping cities gather reams of vehicle data. A CityLab probe of that start-up, Lacuna, reveals that it played a significant role in MDS, even though the city devised the project in part to be a check on the power of such technology companies.

L.A. maintains that the project is the city’s own brainchild, and that it is open to relationships with all businesses that play by its rules. Yet the complicated cast of characters reveals something deeper. In a way, L.A’s effort to impose order on things that move and fly in the city has turned into a low-key replay of the urban tech disruptions of the last decade. Unicorns like Uber, Lyft, and Airbnb drew similar objections when they charged into cities, promising to change the world; now the city is hearing some of the same arguments, from some of the same unicorns.

How did a project that began with tidying up sidewalks turn into such a bitter struggle? This scooter saga shows what happens when the tables turn and the city plays tech disruptor.

Air traffic control, for the streets

Reynolds arrived in L.A. in 2014 after years of leading the livable streets division of San Francisco’s transportation department. Her time in the Bay Area coincided with the early years of the ride-hailing business, as Uber in particular gained a reputation for ignoring local regulations and stonewalling officials from accessing data.

Reynolds wanted L.A. to be on steadier footing in the face of further technological disruption. In March 2018, she awarded a multi-year contract for developing rules and tools in anticipation of autonomous vehicles and other futuristic modes to a firm called Ellis & Associates.

It was an unconventional choice. John Ellis, the founder, was a self-described “big data futurist” and a former technologist at Ford and Motorola. In 2017 he self-published a book called The Zero Dollar Car, which theorized about a marketplace where drivers could sell the data their vehicle generates and conceivably ride for free. Ellis & Associates had no stated experience contracting with local governments. The $1 million-a-year plan that he submitted to Reynolds envisioned something unusual: The city should own the data generated on public rights-of-way and use it to create safer, smoother streets.

“The speed of innovation that’s occurring inside of transportation requires cities to operate at a slightly different pace in order not to stifle that innovation, and in a way that lets the city discharge its stewardship functions,” said Ellis in an interview with CityLab in 2019.

Setting the foundation for L.A.’s happier transportation future would require rethinking the city’s relationship to daily traffic flows, his proposal stated. It imagined an “automatic control system,” in which the city administers movement to vehicles, based on a constant flow of real-time data from bikes, cars, and other vehicles. For example, LADOT could do more than just monitor where drivers and riders were heading: It could control their routes, by sending turn-by-turn guidance through open-source “APIs”—software programs that let other companies directly interface with L.A.’s servers.

A schema from Ellis & Associates’s original bid to work with LADOT depicts how a real-time vehicle control loop operated by the city would work. (LADOT)

Creating this ground-level version of air traffic control would require technology that the city government could not build on its own. Rather than procure specific pieces of proprietary software, Ellis & Associates suggested that L.A. build a software platform, similar to Google’s open-source Android program, so that future developers could easily adapt the infrastructure or create their own.

These ideas were a significant departure from how city DOTs have traditionally collected data, through traffic counts from stationary pavement sensors and pole-mounted enforcement cameras. And they were conceptualized for a future streetscape populated by autonomous vehicles. But when dockless scooters flooded L.A. in summer 2018, it seemed to Reynolds that the moment was right to test her fledgling system.

That fall, the first two scooter companies, Lime and Spin, announced that they would agree to use MDS as part of their permit to operate in L.A. “At LADOT, our job is to move people and goods as quickly and safely as possible, but we can only do that if we have a complete picture of what’s on our streets and where,” Reynolds said at the time.

Privately, the idea of sharing granular information with the city didn’t sit completely well with those scooter operators, whose leaders worried that the standard didn’t sufficiently anonymize their customers’ personal information. “There’s inevitably some tension when we try to balance our commitment to sharing data with our city partners while protecting the privacy of our users,” said Ben Bear, the chief business officer at Spin.

On the other hand, they were also grateful to have a standardized format for communicating with bureaucrats, and they were wary of creating bad blood, as their ride-hailing predecessors had. They hustled to comply with MDS, reworking their internal software platforms. Meanwhile, Reynolds hit the road to promote her vision, speaking at SXSW, CES, TechCrunch, and other global stages.

The pushback from one bigger player was fierce: Uber bucked the new regulations, refusing to follow the rules for its Jump e-bikes, and began to campaign state legislators to back a bill that would restrict local governments from gathering granular data at all. Lyft co-signed a letter of support for the bill and undertook its own Sacramento lobbying efforts. The American Civil Liberties Union and the Electronic Frontier Foundation weighed in too, asserting that MDS could expose individuals to tracking by law enforcement agencies or bad actors if their trip data were subpoenaed or hacked. Even when it is aggregated, location data can be reconstituted to reveal personal information, scientists have shown.

In response to these concerns, LADOT published its first set of privacy principles. The city would protect the data, never sell it, and resist subpoenas, it said. And Reynolds has stuck to her belief in tight monitoring. Near real-time data lets the city quickly locate scooters in the event of a street closure or wildfire, and ensure that companies are serving transit-starved neighborhoods, she says: “It’s really useful for knowing where the fleet is in relationship to the geofence.”

And it seems to help keep the sidewalks clear: In a recent op-ed in Forbes, Reynolds pointed out that 311 complaints about scooters have declined by 73 percent since the city implemented MDS, even as scooter ridership grew.

A collection of Uber’s Jump scooters on the streets of Los Angeles in 2019. (Ronen Tivony/NurPhoto via Getty Images)

By mid-2019, more than a dozen other U.S. cities had adopted L.A.’s data-sharing standard as part of their own scooter permitting schemes, and their ranks were quickly growing. Realizing that decisions about MDS could no longer be made by L.A. alone, Reynolds and Ellis started planning a nonprofit to house and direct the program under a larger umbrella. In June, the Open Mobility Foundation launched with a mission to guide the future of MDS and other city-led rule-making efforts. The director’s board included 13 city transportation officials and its membership included several data and mobility companies, including Microsoft, Stae, Bird, and Spin. Their dues, alongside philanthropic support, provided a financial foundation. (Uber and Lyft were not approached to join.) Reynolds sat as board chair.

“Our goal isn’t to bring start-ups to heel, or shelter MDS from efforts to legislate it out of existence, or to game the public realm for the benefit of private companies,” Reynolds wrote in Forbes in July. “[The Open Mobility Foundation is] about a much larger vision for a new platform to manage urban mobility in all shapes and sizes.”

The missing piece emerges

But one prominent member of the OMF was kept under wraps. That was Lacuna Technologies, a venture-backed start-up that launched in a rented office space at Playground Global, the incubator founded by ex-Googler Andy Rubin (who was later bought out and has no involvement with Lacuna). From Playground’s converted warehouse in Palo Alto (complete with swing set and slide), Lacuna acquired Ellis & Associates, the consultants working with L.A., in November 2018.

Over the next ten months, Lacuna worked in “stealth” mode, in Silicon Valley parlance: It offered no press releases or comments to the media; its website provided a few broad platitudes about bridging the gap between cities and the private sector to anticipate autonomous vehicles.

But Lacuna was busy ingraining itself into LADOT’s work. Lacuna product managers dialed into MDS developer phone calls and began to edit MDS specs on Github, an open-source code repository. Lacuna staff helped LADOT recruit companies to join the Open Mobility Foundation, and put up a $100,000 letter of credit to help finance the burgeoning public-private partnership.

Although Lacuna is registered as a separate entity as Ellis & Associates, and the latter is described as a “wholly owned subsidiary,” Github edits, LinkedIn pages, and emails viewed by CityLab show that employees have presented themselves as representatives of both companies. Making matters more confusing, Ellis sometimes introduced himself at industry events as LADOT’s “chief technologist.”

Why was this tight-lipped company so close to L.A. editing and promoting the standards that L.A. and other cities were using? What were they building? Whispers wended through the intimate world of mobility start-ups and civic technologists.

Hugh Martin, Lacuna’s CEO, says he wishes he could go back and announce Lacuna to the public earlier than it did—it was nothing nefarious, just an oversight. In September 2019, Lacuna revealed itself, pitching itself as an operator of open-source tools for channeling the river of mobility data that cities collect through MDS and other standards, akin to the open-source software builder Red Hat. Martin believes that open source is the key to helping cities to manage their streets, since it lets local governments iterate on one another’s work and avoid getting locked into expensive proprietary systems.

He also thinks DOTs need to stand up the monolithic powers of Uber, which now offers ride-hailing, car-sharing, scooters, helicopters, and even public transit tickets through a single platform. If cities want to be able to capture any of those trips or nudge travelers towards more sustainable modes, they’ll have to compete with the “Amazon of transportation” and build their own digital transportation platforms.

“Any city in the world where you can get off the plane and open the Uber app … that city has a problem,” Martin told CityLab in an interview last fall. “They’re already starting to need tools to manage this stuff.”

But most cities face a technical skill gap. “We own Ellis & Associates, so I know what a heavy lift it is to get L.A., which is sophisticated,” he said. Less advanced municipalities will need more hand-holding to achieve their own digital mobility revolutions, and Lacuna is there to fill the void, as its name implies.

Yet competing start-ups, such as Remix, Populus, and RideReport, also help scooter companies and cities sort through shared pools of information using MDS. Their leaders worry that the relationship between Lacuna and LADOT raises ethical questions, because the same private entity that helped architect L.A.’s open-source digital mobility rules and spread them to dozens of cities now seeks to profit by helping new cities run those regulations. In effect, through Ellis & Associate’s close work with LADOT, they say that Lacuna helped build its own market, without being upfront about its intentions early on.

“Any company that is working with a city and has a powerful role in defining standards that most cities are using should say, ‘Here is what our plan is,’” said William Henderson, the CEO of RideReport. “It makes people really uncomfortable when one company is playing by a different set of rules or appears to be.”

Such a two-sided position between cities and mobility companies is ripe for what’s known as “vendor capture,” according to Molly Turner, a start-up adviser, urban innovation lecturer at the U.C. Berkeley Haas School of Business, and CityLab contributor. When that dynamic is paired with the hockey-stick growth expectations of venture capital investors, the pressure to win can encourage start-ups to behave aggressively. “Venture capital has the potential to make a ton of money off of solving these urban problems,” said Turner. “But when an idea comes out of City Hall, venture funding can also create a ton of perverse incentives and ethical challenges for all parties involved.”

In this case, the more difficulty cities have implementing MDS, the better third-party intermediaries such as Lacuna, Remix, Populus, and RideReport do, since their job is to help cities make sense of technical matters. Lacuna—which is now advised by Bradley Tusk, the political strategist who famously helped Uber conquer New York City regulators and has since said the company has “lost their mojo” under its new CEO—could be particularly well-positioned, Turner said: It has had access to the behind-the-scenes challenges that at least one city faces and shaped MDS code when L.A. still owned it.

Some players also say that the data standard’s fundamental design fails to meet the needs of some cities that have adopted it, pointing to a recent report from Chicago that found limitations with MDS in its scooter permitting pilot. (That city also said that having data standards in general was “an absolute necessity.”) “Because the data standards seem to be designed for an alternative purpose, real-time control and management of autonomous vehicles (using scooters as an experiment), we find that the standards cities have adopted fail to adequately answer some of the key questions cities have around safety and equity,” said Rodney Stiles, the head of policy at Populus.

Whether or not Lacuna has an unfair advantage, competitors say Lacuna and LADOT ought to have been more transparent about the start-up’s role inside MDS.

LADOT holds that Lacuna’s business interests have been kept duly separate from Ellis & Associates’ work on MDS, and that it has been transparent about its nature and purpose. The city says MDS began as a “bootstrapped” project by its own staff and predates the start-up’s existence. “Private mobility companies, they are responsible to their shareholders,” said Connie Llanos, LADOT’s assistant general manager of external affairs. “We’re responsible to everyone.”

LADOT also says that building MDS in open-source code shields against the adverse effects of privileged vendor relationships. “This has allowed others, even Uber, to make edits to the specs,” said Llanos. “It also allows all companies to develop tools and programs to complement the system, since its available in the open market. This process is in complete opposition to the vendor capture model.”

Lacuna’s Martin says his company has no special benefits inside OMF, and dismisses questions about its access to LADOT as axe-grinding from competitors. The start-up is simply working to help cities contend with much larger threats to the public good. “I think it’ll be very interesting to look back in five years to see what cities accomplish and cause industry to do things in their service, and say, ‘Was someone saying something about Lacuna?’” he said.

Still, Reynolds, LADOT’s general manager, recognizes the potential for profit interests to interfere when cities depend on consultants and private sector expertise for technological needs, even as they’re standing up to other companies like Uber. She says she is putting protections in place within LADOT to make sure the social-good objectives of MDS are kept intact, and to avoid any appearance of impropriety.

“There are no models for what we are trying to do, and the stakes are very high for cities to have an equal footing with the private sector so we can have a collaborative approach to the challenges we face,” she said. “The credibility of the work matters deeply.”

An unlikely fighter for privacy rights

That credibility is something Uber appears to be set on destroying. Its staff has seized on the murky relationship between L.A. and its consultants, as well as the “automatic control” system they envision, to fight the city.

To serve as legal representation in a civil appeals hearing in January, Uber secured civil rights attorney Roberta Kaplan, co-founder of the Time’s Up Legal Defense Fund (who’s also currently representing the journalist E. Jean Carroll in her defamation suit against President Donald Trump). After Uber refused to share near real-time data with L.A., the city revoked its permit to operate e-bikes. In two days of arguments and witness testimony at City Hall to fight that decision, Kaplan and her colleagues made the case that Uber’s refusal to abide by MDS was fundamentally about rejecting the future the city hopes to achieve.

“It is surely no exaggeration to say that what LADOT is proposing here resembles the world of a dystopian novel, like 1984 or Brave New World… where the government tracks its citizens in real-time about where people were, where they are, and where they are going,” Kaplan said, according to a transcript. Her colleagues pointed repeatedly to the potential for L.A.’s consultants to profit.

If you’re thinking that it’s rather rich for Uber raise a fuss about tracking and spying—this was the company that used Greyball and failed to alert customers after spilling millions of private records for more than a year—you’re not wrong. Uber has claimed user privacy protections as a defense for locking down data before, and that hasn’t exactly been the full story. The company is keen to guard trade secrets from competitors, and new municipal laws could inhibit its growth plans. Local regulations and data breaches were cited as substantial business risks in Uber’s SEC filings ahead of its IPO last year.

In Uber’s appeals hearing, LADOT’s lawyers countered that the factual heart of the dispute—that Uber shirked the regulations that L.A. is legally entitled to establish—was cut and dried. They also questioned whether Uber planned to follow the rules at all. The city won.

Now Uber plans to escalate its case to the LADOT board. It’s also heading back to Sacramento. Uber is lobbying state lawmakers on last year’s bill that would preempt cities from gathering granular data at all. Uber has also pressed legislators to investigate whether MDS violates California privacy statutes, and Uber, Populus, and Reynolds herself will testify about MDS before members of the California senate judiciary and transportation committees on February 25. Uber has also threatened to sue L.A. to reinstate its Jump permit. It is also suing the state of California over another major regulatory threat to its business model, the worker protection law known as AB5.

Meanwhile, changes are coming to MDS. The Open Mobility Foundation is now in charge of the open-source code, and many members do not share LADOT’s vision for using the data-sharing standard as the basis for a vehicle control system. Speaking for her city, Robin Hutcheson, the director of public works in Minneapolis and a director of the OMF board, said that “we think it’s essential that data is aggregated and anonymized.” Having a standard has helped immensely with managing her city’s mobility networks, she said. The organization is establishing practices for anonymizing MDS data, and discussing a range of appropriate uses for it. Reynolds has also developed more nuanced ideas about the “digital twin” of L.A. streets she hopes to build. Perhaps the granularity of data required will depend on the mode, she says; Ellis’ “air traffic control” metaphor no longer really fits.

Whether Uber’s legal and lobbying challenges will put a chill on the MDS project—and the emerging business interests that have quietly aligned themselves with it—remains to be seen. Reynolds has been astonished by the level of pushback that has greeted her efforts. After all, people yield far more intimate information to private companies all the time—three times as much as what MDS gathers, according to Llanos—despite the constant drumbeat of consumer data breaches and corporate misdeeds. Across California cities, congestion and vehicle-miles are on the rise, as are traffic fatalities; the ride-hailing industry has likely contributed to these trends. Yet here, a well-intended effort to manage L.A.’s streets and get ahead of sea-changes in transportation has been met with resistance, intense scrutiny, and charges of assembling an Orwellian surveillance regime.

That’s the price of being an innovator in local government, Reynolds said: “The criticisms that you open yourself up to are even more than if you stick with the status quo.”

That may be a familiar feeling for the people inside the venture-backed start-ups that got cities into this mess to begin with. As L.A. has sought to rein in such disruptors, it has, in a way, become one of them. “The move to collect data, then think about the implications later—that’s totally the tech company playbook,” Henderson said.

Indeed, although L.A.’s mission has been all about the public sector standing up to private companies, it turns out the battle lines are not so clear.

“The stakes were not equal, and we weren’t on equal footing,” Reynolds said at an industry event in December. “In order to get companies to speak to us, we had to speak in their language.” Nearly two years later, it seems L.A. has become a lot more fluent.

Sarah Holder contributed reporting.